Pearson offloads Lazard stake for £410m

Media group Pearson yesterday made good its long-standing pledge to exit from banking when it sold its interests in the Lazard investment banks for £410m. The deal was made all the sweeter by the simultaneous announcement that Pearson is upgrading its relationship with Spanish telecoms group, Telefonica, as part of its drive into multimedia markets.

Investors welcomed the news as further evidence that Pearson's chief executive, Marjorie Scardino, was maintaining momentum in refocusing the group on core activities. Pearson shares rose to close at £13.28, a 78p increase.

Pearson sold its stake to Gaz et Eaux, a French-listed company controlled by Michel David-Weill, a member of one of the founding families of Lazard and chairman of the Lazard group.

Although Ms Scardino had wanted to sell the stake for some time the transaction was tricky, given the complex pre-emption rights held by Lazard.

The sale was made easier, however, when the three Lazard investment houses in London, New York and Paris unveiled plans to centralise their ownership in a single global partnership.

Noting that Pearson's 80-year partnership with Lazard had been "long, happy and very profitable", Ms Scardino said the move would enable Pearson to invest all its resources in the businesses that are crucial to its future.

The deal entails Pearson selling its 50% interest in the London-based arm of Lazard, its 7.6% interest in Lazard Freres in New York, and its 8% interest in Lazard Freres in Paris. Pearson will receive a further dividend of £15m on completion of the deal. Pearson's Lazard interests paid dividends of £25m last year.

David Verey, chairman of Lazard Brothers in London, insisted that Gaz et Eaux's ownership would not increase Mr David-Weill's influence over the group at a time when banking sources believe Lazard ought to be appointing his successor. "Gaz et Eaux is a listed company and has an independent board," he said.

Lazard, owned by 150 partners, had no intention of ending its partnership structure.

In a related transaction Gaz et Eaux is selling a 5% stake in Pearson to Telefonica for £402m. Pearson is in turn buying out Telefonica's 20% stake in Recoletos, Pearson's media operation in Spain.